You applied for Long Term Disability [“LTD”] benefits through a group policy associated with your employment. Unfortunately, your application for LTD benefits was denied.

A federal law—known as the Employee Retirement Income Security Act [“ERISA”]—applies to disputes like this. Under ERISA, you must exhaust the internal appeals process of the LTD insurer before you can file a lawsuit in federal court to challenge the denial. The denial letter to you should have explained how to appeal and the deadline for doing so (typically 180 days).

2018 Regulations

Late in 2017, the United States Department of Labor issued final regulations that require new procedures in group LTD claims. These procedures first took effect during April 2018.

With respect to group LTD claims filed on or after April 1, 2018, the following procedures apply:

Claims and appeals must be decided in a manner designed to insure independence and impartiality of the persons involved in making the benefit determination, such as claims adjudicators, or medical or vocational experts.

Benefit denial notices must contain a complete discussion of why the plan denied the claim and the standards applied in reaching the decision, including the basis, if any, for disagreeing with the views of health care professionals, vocational professionals, or with disability benefit determinations by the Social Security Administration.

Initial benefit denial notices must include a statement that the claimant is entitled to receive, upon request, the entire claim file and other relevant documents.

Initial benefit denial notices must include any internal rules, guidelines, protocols, standards or other similar criteria of the plan that were used in denying a claim, or contain a statement that none were used.

Claimants must be given notice and a fair opportunity to respond before a denial at the appeals stage that is based on new or additional evidence or rationales.

The plan must not prohibit a claimant from seeking court review of a claim denial based on a failure to exhaust administrative remedies if the plan failed to comply with significant claims procedure requirements (“deemed exhaustion”).

Rescissions of coverage, except for rescissions for non-payment of premiums, must be treated as adverse benefit determinations triggering the plan’s appeals procedures.

Appeal determinations must include a description of any applicable contractual limitations period and its expiration date.

Required notices and disclosures issued under the claims procedure must be written in a culturally and linguistically appropriate manner.

Effective Internal Appeals

In our experience, the most effective internal appeals include one or all of the following:

(1) statements from one or more of your treating doctors that address specifically the medical issues cited in the denial by the LTD carrier;

(2) statements that address whether the LTD insurer failed to comply with the 2018 regulations; and

(3) statements about the nature and scope of work you did in your last job (assuming that the LTD policy says that you get paid if you cannot perform the duties of your last job).

Thus, and because there is little “lawyering” during this part of the process, we generally discourage people from hiring us (or any lawyer) at this part of the process. In fact, we believe that folks who have to spend money at this part of the process should consult with a vocational expert regarding item (3) above.

Lawsuits When Internal Appeals are Denied

If the internal appeal is denied, your only recourse is to file a lawsuit in federal court. Unfortunately, the law is NOT favorable to individuals who do so. As a general rule, you will lose your lawsuit unless you can prove that the LTD carrier’s decision was arbitrary and capricious (aka irrational). This is VERY difficult to prove. In most civil lawsuits, the person suing wins if they prove their case by a preponderance of the evidence. This means simply that their proof is more convincing than the proof offered by the defendant.

If you worked in the public sector (e.g., public school district or state, county, city or town government) at the time you became disabled, you might be able to collect disability pension benefits from one of several retirement systems in the State of New York. Three are statewide pension systems (Teachers; Police & Fire; State & Local Government). We will refer to these generally as NYSRS (New York State Retirement System) disability pension benefits.

Who is eligible to receive NYSRS disability pension benefits?

Your eligibility depends on several factors including when you joined the NYSRS and the number of years of employment you have completed. Currently, NYSRS members fall into one of several levels of participation called “tiers.” For example, Tier I participants have been members of NYSRS longest and have the best benefits. Tier VI participants have been members of the NYSRS for a shorter time and have benefits less valuable than Tier I participants.

How do I qualify for NYSRS disability pension benefits?

There are different types of disability pension benefits. They include ordinary (non-work related), performance of duty and accidental disability pension benefits. You may NOT be eligible to apply for or otherwise collect each different type of disability pension benefit.

To qualify for ordinary disability pension benefits, you have to prove that you are “permanently incapacitated” from performing your particular job AND you must have ten (10) or more years of credited pension service.

To qualify for performance of duty disability pension benefits, you have to prove that you are “physically or mentally incapacitated for performance of gainful employment as the natural and proximate result of an accident not caused by [your] own willful negligence sustained in the performance of [your] duties.”

It is VERY difficult to qualify for an accidental disability pension benefit under the language of the relevant statutes and judicial interpretations of that language. The law does not define “accident” as we commonly think of the term.

How much is the NYSRS disability pension benefit?

The amount of your benefit depends on several factors including your Tier of participation, the amount of money you have earned in public service, the type of disability pension you collect and whether you want your loved ones to collect your disability pension benefit on your death. For example, a performance of duty disability pension benefit is usually greater than an ordinary disability pension benefit for participants in the same Tier.

Each year, you should receive a statement from the New York State Comptroller’s Office which provides some helpful information about your anticipated pension benefits. You can get more precise benefit information by meeting with a NYSRS representative. To schedule such a meeting, visit: http://www.osc.state.ny.us/retire/consultation_site_offices/index.php

When do I have to apply?

As a general rule, you must apply while you are “in service.” This means that you are being paid on the payroll of the public employer or you are on an authorized medical leave of absence. For some types of benefits, your application is timely if you file it within a certain period of time after you were last on the payroll or your employment was terminated.

Should I list ALL my problems when I apply for NYSRS disability pension benefits?

ABSOLUTELY. If you fail to list an impairment on your application, you may be barred from having the condition considered as part of the reason that you are unable to work.

Will I have to see a NYSRS doctor?

As a general rule, you may be examined by one or more doctors who are paid by NYSRS. This doctor will review your medical records, examine you and give an opinion about any of the issues in your NYSRS case including whether you are permanently incapacitated from performing your job in the public sector.

Who decides if I am entitled to NYSRS disability pension benefits?

A Medical Board of the New York State Comptroller’s office initially decides whether you are eligible for NYSRS disability pension benefits. If they deny your application, you have a right to challenge that denial by appearing before an independent Hearing Officer.

What do I have to do to request a hearing? How long do I have?

If your application is denied by the Medical Board, you can request a hearing by making a written request to NYSRS. When you receive notice that your initial application has been denied, you will be advised how to request a hearing. You must request a hearing within four months from the date of the determination which denied your application.

Who presides at the hearing?

The Hearing Officer presides at the hearing and is ultimately responsible for deciding whether you are entitled to NYSRS disability pension benefits. Many Hearing Officers are retired Judges who served in various City and State Courts.

How can I prove my case?

You will testify about your physical and mental problems and how they prevent you from performing your job in the public sector. We also are required to offer medical evidence about your physical and mental conditions.

Do I have to pay a doctor to testify on my behalf?

We can offer medical records and NOT present live testimony. This is a less expensive option, however, it is usually less effective particularly if one or more of your treating doctors will testify strongly that you are permanently incapacitated from working.

We recommend that you discuss with your treating physicians whether they were willing to testify on your behalf and, if so, how much they would charge you for their testimony.

How much time will you need from my doctor?

NYSRS cases are LESS adversarial than personal injury litigation. In our experience, no more than four hours is needed from any physician who testifies. This generally represents: (1) one hour to review your file; (2) one hour to meet with us to prepare for the testimony; and (3) two hours to review your file again, travel to the hearing, testify and travel back to their office. In Rochester, most NYSRS hearings are held at Rochester City Hall. We handle NYSRS cases throughout upstate New York.

Do witnesses testify against me?

NYSRS may call to testify any of the doctors who examined you on their behalf. Depending on the disputed issues, they may call other witnesses too.

When does the Hearing Officer issue his/her decision?

After all the witnesses have testified, the Hearing Officer generally requires written arguments in support of your position that you are entitled to NYSRS disability pension benefits. The written arguments are submitted within a deadline set by the Hearing Officer.

Why should I hire a lawyer to represent me?

If you are denied NYSRS disability pension benefits, we believe that you should hire an experienced lawyer to assist you. An experienced lawyer will answer your many questions about the process, will protect your rights, will secure relevant medical and employment records, will develop a viable legal theory and will prepare you thoroughly for your hearing.

Thereafter, the lawyer will deal with many issues that can arise after a hearing, including whether you are collecting the appropriate amount of money.

NYSRS law is very complex. Proper interpretation requires knowledge in several areas other than the law. To illustrate, one must be familiar with medicine, medical terminology and the description and physical demands of various jobs. An experienced lawyer will know how to cross examine a physician who examined you on behalf of NYSRS.

What do attorneys charge for their services?

Some attorneys are willing to represent you on a contingent fee basis. This means that there is no fee owed to the attorney if the Hearing Officer denies your application.

If your application is successful, the usual contingent fee is thirty-three and one-third percent (33-1/3%) of the GROSS lump sum of benefit that is paid to you.

We are prohibited by law from paying out-of-pocket expenses incurred to prosecute your claim. These expenses usually consist of copying costs, postage and payment to doctors for medical reports. You will be responsible for payment of these expenses regardless of whether your claim is successful. In our experience, most clients incur less than $200 in expenses. The single largest expense is the cost of medical records that we secure for your case. As you may know, doctors are permitted by law to charge us .75 for every page of medical records that they provide to us.

NYSRS does NOT make direct payment to the attorney for any fee earned. Thus, the law firm has to be confident that his/her client is trustworthy and will pay the fee when they receive their lump sum of back benefits.

A Final Thought

We know that this process is difficult and confusing. We welcome the opportunity to answer your questions.

INTRODUCTION

Our clients are living and working longer than ever before. Many will sustain a permanent or partial disability at some time during their lives. Some will look to us for assistance. This outline provides basic information about selected disability benefit programs.

SOCIAL SECURITY DISABILITY BENEFITS

Generally, your client must be at least 62 years old to collect a Social Security retirement benefit. To collect a full (unreduced) Social Security retirement benefit, your client must be at least 65 years old. The amount of benefit is determined primarily by how much your client has earned during her working life.

A person is “disabled” if they are unable “to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months” [42 U.S.C. § 416 (i)(1)(A)]. If your client is disabled–and meets certain non-medical rules–she can collect her full Social Security retirement benefit early. This is known as Social Security Disability [“SSD”].

To qualify for SSD benefits, your client must be unable to perform her past relevant work–and other jobs in the national economy–considering her age, education, work experience and disability. Your client also must have paid enough into the Social Security system–and had enough recent work activity–to qualify for SSD benefits.

If your client is approved for SSD benefits: (1) she will be eligible to participate in the Medicare health and hospital insurance program after a waiting period (24 months from the first month they receive a SSD benefit); and (2) her dependent MINOR children are eligible for SSD benefits. SSD benefits are taxable. No one is paid SSD for the first five months that they are disabled.

Practical Advice

Urge your client to apply for SSD benefits as soon as possible because the process can be incredibly SLOW. A claim can be started by calling the Social Security Administration [“SSA”] at 1-800-772-1213 or online at http://www.ssa.gov.

Do not wait until your client has been unable to work for 12 months or more to apply for SSD benefits. If your client returns to work before the requisite 12 month period, she can withdraw her application for SSD benefits without a penalty.

Your client should discuss her intent to file for SSD benefits with her physician. Although physician support is very important, the claim can succeed in its absence. Do not practice medicine. Do not let your client’s physician practice law.
If your client applies for unemployment insurance benefits, she certifies that she is able to work but cannot find work. This can be inconsistent with her application for SSD benefits.

As a general rule, attorneys can earn a fee for representing claimants in SSD cases only IF they recover back benefits for their client. Refer your client to a qualified attorney. If you do not know a qualified attorney, contact the Monroe County Bar Association Lawyer Referral Service [“LRS”] at (585) 546-2130.

WORKERS’ COMPENSATION BENEFITS

Employers are required to provide Workers’ Compensation [“WC”] insurance coverage for all employees. If your client was injured at, or became ill by, work, she may be eligible.

If eligible, your client can collect a weekly lost income benefit equal to 66-2/3% of her average weekly wage but NOT more than a maximum amount in the law (depends on date of illness or injury). The WC insurance carrier pays 100% of the cost of medical treatment. Your client is entitled to reimbursement for mileage and other expenses associated with receiving medical treatment. WC benefits are NOT taxable.

Attorneys cannot charge an hourly fee for representing claimants in WC cases. As a general rule, they can earn a fee only if money is paid to their client AND the fee is approved by a Judge of the WC Board. Refer your client to a qualified attorney in your community. If you do not know a qualified attorney, contact the LRS at (585) 546-2130.

Will Receipt of WC Benefits Affect SSD?

Sometimes. The sum of SSD and WC benefits received by your client cannot exceed 80% of her pre-disability income. SSA has three different ways to determine pre-disability income.

The amount of your client’s pre-disability income usually is determined by calculating her average monthly (gross) earnings during the five consecutive years that she earned the most money. The combined amount of her SSD and WC benefits CANNOT exceed eighty percent (80%) of that amount. If it does, your client’s SSD benefit (and NOT WC benefit) is reduced.

MANDATORY SHORT TERM DISABILITY BENEFITS

Employers are required by New York law to provide short term disability [“STD”] insurance coverage. The Disability Benefits Law is found in Article 9 of the New York Workers’ Compensation Law (WCL §§ 200-242). Disability “during employment” is defined as:

the inability of an employee, as a result of injury or sickness not arising out of and in the course of an employment, to perform the regular duties of his employment or the duties of any other employment which his employer may offer him at his regular wages and which his injury or sickness does not prevent him from performing.

Disability “during unemployment” is defined as:

the inability of an employee, as a result of injury or sickness not arising out of and in the course of an employment, to perform the duties of any employment for which he is reasonably qualified by training and experience.

Disability also includes disability caused by or in connection with a pregnancy [WCL § 201 (9)].

If your client: (1) was employed for at least four weeks at the time she became disabled; (2) became disabled within four weeks after leaving her last job; or (3) was collecting unemployment insurance benefits at the time she became disabled, she may be eligible to collect STD benefits.

If eligible, your client can collect a weekly benefit equal to 50% of her weekly wage or $170.00, whichever is LESS. There is a one week waiting period. Your client can collect STD benefits for up to 26 weeks. There are no associated medical benefits. STD benefits are taxable.

Your client can collect up to 26 weeks of unemployment insurance OR STD benefits. She CANNOT collect 26 weeks of BOTH types of benefits.

Practical Advice

Urge your client to apply for these benefits as soon as possible. A claim can be started by completing the appropriate form. The form requires information from your client and her treating physician. In some cases, information is needed from your client’s current employer.

If your client was employed at the time she sustained her disability, she needs to complete form DB-450. That form should be available from her employer. If your client cannot get that form, she can download it at http://www.wcb.ny.gov/content/main/forms/db450.pdf

If your client sustained a disability within four weeks after she left her last job, or if she was collecting unemployment insurance benefits at the time she sustained her disability, she needs to complete form DB-300. She can get that form from the closest office of the NY WC Board or she can download it at http://www.wcb.ny.gov/content/main/forms/db300.pdf

Attorneys cannot charge an hourly fee for representing claimants in STD benefit cases. They can earn a fee only if they recover back benefits for their client AND the fee is approved by a Judge of the WC Board. Refer your client to a qualified attorney. If you do not know a qualified attorney, contact the LRS at (585) 546-2130.

Will Receipt of STD Benefits Affect SSD?

No. SSD benefits do not start until AFTER STD benefits stop.

GROUP “ENHANCED” SHORT TERM & LONG TERM DISABILITY BENEFITS

If your client was employed at the time she became disabled, she might be eligible for group “enhanced” short term disability benefits (which exceed the mandatory STD benefit discussed above). If your client’s disability has lasted (or is expected to last) 26 weeks or more, she may be eligible for group long term disability [“LTD”] insurance benefits.

These benefits are provided pursuant to a written agreement which will often define important terms such as “disability.” Employers are NOT required to provide these benefits, however, many larger employers do so. These benefits are generally taxable.

Practical Advice

Your client should contact her employer immediately, get the appropriate claim form and complete it as soon as possible.

Do not rely on oral representations by human resource/employee benefit staff who work for your client’s employer. Request a copy of the disability benefits insurance policy/plan and read it. Request a copy of the Summary Plan Description (lay person’s description) and read it.

Most disputes concerning group LTD policies are subject to ERISA and its “arbitrary and capricious” standard of judicial review. This is a VERY difficult standard to meet. A prevailing party MAY be entitled to an award of attorneys’ fees.

Attorneys may charge an hourly fee for representing claimants in group LTD cases. Refer your client to a qualified attorney. If you do not know a qualified attorney, contact the LRS at (585) 546-2130.

Will Receipt of SSD or WC Benefits Affect a Group LTD Benefit?

Usually. Most group LTD policies allow the insurance carrier to reduce the amount of the LTD benefit owed to your client by the amount of her WC and SSD benefit. This includes a reduction for the amount of SSD benefit received by your client’s MINOR CHILDREN.

These and other offset provisions are contained in the LTD policy. Request a copy of the LTD policy and read it.

INDIVIDUALLY PURCHASED LONG TERM DISABILITY BENEFITS

Your client may have purchased a LTD insurance policy on their own or through a trade association. Your client should contact her agent and/or the insurance company to get the appropriate claim form. These benefits are provided pursuant to a written agreement which will often define important terms such as “disability.”

Practical Advice

Disputes concerning individual LTD policies are NOT subject to ERISA. The reviewing court applies a de novo standard which is more favorable for someone seeking benefits. As a general rule, the Court may NOT award attorneys’ fees to the prevailing party.

Attorneys may charge an hourly fee for representing claimants in individual LTD cases. Refer your client to a qualified attorney. If you do not know a qualified attorney, contact the LRS at (585) 546-2130.

Will Receipt of SSD or WC Benefits Affect an Individual LTD Benefit?

Usually NOT. If your client paid the LTD policy premiums with after tax dollars, the LTD benefits are NOT taxable. Request a copy of the individual LTD policy and read it.

DISABILITY PENSION BENEFITS–PRIVATE SECTOR EMPLOYEES

If your client was employed at the time she became disabled, she might be able to draw her pension early and without a penalty (like SSD). Some private employers and labor unions offer disability pension benefits. These benefits are generally taxable. These benefits are provided pursuant to a written agreement which will often define important terms such as “disability.”

Practical Advice

Your client should contact her employer or union immediately, get the appropriate claim form and complete it as soon as possible. Many employers and labor unions will not provide a disability pension unless and until your client is awarded SSD benefits.

Do not rely on oral representations by human resource/employee benefit staff who work for your client’s employer or labor union. Request a copy of the pension plan and read it. Request a copy of the Summary Plan Description (lay person’s description) and read it.

Attorneys may charge an hourly fee for representing private sector employees in disability pension benefit cases. Refer your client to a qualified attorney. If you do not know a qualified attorney, contact the LRS at (585) 546-2130.

Usually NOT, however, you must check the Pension Plan to be sure. Request a copy of the Pension Plan and read it.

DISABILITY PENSION BENEFITS–PUBLIC SECTOR EMPLOYEES

If your client was employed in the public sector at the time she became disabled, she might be able to draw a disability retirement pension from one of several retirement systems for public employees in the State of New York. Three are statewide pension systems (Teachers; Police & Fire; State & Local Government workers).

There are different types of disability pension benefits including ordinary (non-work related), accidental and performance of duty. These benefits generally are state income tax free IF the pensioner lives in New York.

To qualify for ordinary disability pension benefits, your client generally has to prove that she is “permanently incapacitated” from performing her particular job. To qualify for “performance of duty” disability pension benefits, your client generally has to prove that she is “physically or mentally incapacitated for performance of gainful employment as the natural and proximate result of an accident not caused by [her] own willful negligence sustained in the performance of [her] duties.” It is VERY difficult to qualify for an “accidental” disability pension benefit under the language of the relevant statutes and judicial interpretations of that language.

Practical Advice

Your client should contact her employer immediately, get the appropriate claim form and complete it as soon as possible.

Navigating the various retirement systems is very complex. Public sector labor union officials are usually good sources of information.

The Office of the New York State Comptroller [“OCS”] has responsibility for the Retirement Systems of the State & Local Government Employees and for Police/Fire. The OSC website is a good source of information. It can be found at http://www.osc.state.ny.us/retire/ The site contains application forms and descriptions of the various benefit programs.

The New York State Teachers’ Retirement System [“TRS”] is a separate entity. The TRS website is a good source of information. It can be found at http://www.nystrs.org/

There are very short deadlines for taking action. There are many quirky notice provisions. Stated simply, there are many traps for the unwary.

Attorneys may charge an hourly fee for representing claimants in disability benefit cases before the various retirement systems. Refer your client to a qualified attorney. If you do not know a qualified attorney, contact the LRS at (585) 546-2130.

Will Receipt of SSD or WC Benefits Affect a Public Sector Disability Pension Benefit?

Sometimes. For example, for New York State Retirement System cases, your client’s “Tier” of participation may determine whether her benefit is reduced by SSD or WC benefits. Read the relevant statute.

MISCELLANEOUS DISABILITY BENEFITS

By virtue of her disability, your client may be eligible for certain additional benefits. For example, your client may be entitled to defer or waive her obligation to: (1) repay a student loan; (2) pay life insurance policy premiums; and (3) make automobile, mortgage, credit card or other payments. These benefits are provided pursuant to a written agreement which will often define important terms such as “disability.”

Do not rely on oral representations by customer service representatives who work for credit card and similar companies. Request a copy of all relevant documents and read them. Your client should get the appropriate claim form and complete it as soon as possible.

Will Receipt of SSD or WC Benefits Affect Receipt of Miscellaneous Disability Benefits?

Usually NOT, however, you must check the “contract” that provides the benefit. Request a copy and read it.

Most union members and officials know about the benefits available to an employee who sustains an “on-the-job” injury. Far fewer know about the benefits available to an employee who sustains an “off-the-job” illness or injury.

Although each case is different, union members and officials need to know that:

1. A member who has worked for at least 4 weeks and who suffers an “off-the-job” illness or injury is entitled to collect disability benefits to replace part of the wage he would have earned if he were not disabled.

Building Trades Note Suppose a member was hurt in an “off-the-job” accident that occurred just after he returned to work for Contractor A in the spring. The member’s claim may be denied because he was not employed by Contractor A for at least 4 weeks. We have won claims by arguing that prior service with Contractor A (for example, during the prior summer or fall) must count toward the 4 week period.

2. Costs of medical care are not included. The benefit is a lost wage benefit only.

3. The member is entitled to collect $170 per week or 50% of his average weekly wage, whichever is smaller.

4. The member is entitled to collect disability benefits for up to 26 weeks. The member is not entitled to collect benefits for the first week of disability but can collect for the next 26 weeks.

5. A member who suffers an “off-the-job” illness or injury during the first four weeks after his last employment ends is entitled to collect disability benefits under the insurance policy of his former employer.

Building Trades Note: Suppose a member was hurt in an “off-the-job” accident that occurred on the day he started working for Contractor B but within 4 weeks after he stopped working for Contractor A. If the claim is submitted to Contractor B’s insurance company, it will be denied because he was not employed by Contractor B for at least 4 weeks. If the claim is submitted to Contractor A’s insurance company, however, it will be paid.

6. A member who suffers an “off-the-job” illness or injury more than four weeks after his last employment ends and who is collecting unemployment insurance benefits is entitled to collect disability benefits to replace the unemployment insurance benefits that he would have collected if he were not disabled.

Building Trades Note: Suppose a member was hurt in an “off-the-job” accident that occurred more than 4 weeks after his last job ended and while he was collecting unemployment insurance benefits. The member is entitled to collect disability benefits for each week that he otherwise would have collected unemployment insurance benefits if he were physically able to work. Although the disability benefit is lower than the unemployment insurance benefit, it provides at least some income to the member.

7. Under the law, if the claim is properly completed and the health care provider’s statement has been received, the member can expect to receive his first payment at the end of the third week of disability or 4 business days after the claim is received, whichever is later.

8. Claims must be filed within 30 days after the member becomes disabled. Claims filed later may result in the member not being paid for any period of disability more than two weeks before the claim was filed.

9. A member whose claim for disability benefits is denied may appeal the adverse decision to the Workers’ Compensation Board by filing a request for review.

10. A member who suffers an “off-the-job” illness or injury and who is unable to work for at least 12 months may be eligible for Social Security Disability benefits. This will allow the member to draw his ultimate Social Security retirement benefit early and without penalty.